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The Government as Reinsurer of Catastrophe Risks?

Author

Listed:
  • Véronique Bruggeman

    (Maastricht European Institute for Transnational Legal Research (METRO), Maastricht University, Bouillonstraat 3, Maastricht 6211LH, the Netherlands.)

  • Michael G Faure

    (Maastricht European Institute for Transnational Legal Research (METRO), Maastricht University, Bouillonstraat 3, Maastricht 6211LH, the Netherlands.
    Rotterdam Institute of Law and Economics, Erasmus University Rotterdam, Brugemeester Oudlaan 50, PO Box 1738 3000 DR Ritterdam, the Netherlands)

  • Karine Fiore

    (Centre d'Analyse Economique, UPCAM, 3, ave Robert Schuman, 13628 Aix-en-Provence cedex1, France.)

Abstract

Compensation for victims of catastrophes is a hot topic in many countries today. Consequently, the legislator is increasingly intervening in the catastrophe insurance market in order to stimulate its functioning. Various forms of public-private partnerships have hence developed, although law and economics scholarship has differing views on this type of government intervention. The aim of this paper is to add to that debate by, on the one hand, discussing a few specific cases where the government acts as a reinsurer of last resort or as a primary insurer, and by, on the other hand, confronting these practical examples with five main conditions that would have to be fulfilled to make government intervention efficient—or at least as little disruptive as possible: market failure, the charging of risk-based premiums, the stimulation of existing market solutions, the freedom to choose for State reinsurance and the temporary character.

Suggested Citation

  • Véronique Bruggeman & Michael G Faure & Karine Fiore, 2010. "The Government as Reinsurer of Catastrophe Risks?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 35(3), pages 369-390, July.
    • Handle: RePEc:pal:gpprii:v:35:y:2010:i:3:p:369-390
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    Cited by:

    1. Amanda Savitt, 2017. "Insurance as a tool for hazard risk management? An evaluation of the literature," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 86(2), pages 583-599, March.

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